New code for financial advisors no easy option

The Australian Securities and Investments Commission warned financial advisers that adhering to a proposed code of conduct was not an easy option to avoid compliance with controversial opt-in regulations.

Under an opt-in scheme, advisers would be required to renew their clients’ fee agreements every two years.

ASIC commissioner Peter Kell, who released a consultation paper on the issue on Tuesday, said: “We expect that they will contain provisions requiring members to have active obligations towards their clients that will achieve the same outcome as the opt-in requirement intends to achieve," he said.

Submissions in response to the paper close on December 3 and the code system begins in July. King & Wood Mallesons partner Jim Boynton described the test as “demanding".

Mr Boynton said additional obligations under the code included a commitment that the advice was “commensurate with the fees charged".